Former MLB star Alex Rodriguez has worn many hats. Mariner. Ranger. Yankee. Pepsi Spokesperson. SPAC CEO. Chairman of Presidente Beer.
And he just fitted himself with a new one: Venture Capitalist. The one time slugger, joined by entrepreneur Marc Lore, has founded a new VC firm called Vision/Capital/People (VCP). While a celebrity with an ungodly amount of money isn’t exactly news, this new firm’s approach to financing certainly is.
Swinging for the Fences
It feels like A-Rod and Lorre have tried their hand at just about every business trend going this year. In February, they hopped into the blank check craze, launching a SPAC with a $500 million IPO. On Thursday, they finalized an agreement to buy the NBA’s Minnesota Timberwolves for a cool $1.5 billion.
And now, the duo’s latest endeavor is shaping up to be their most disruptive move yet:
- VCP plans to buy 40% to 80% stakes in various startups – much larger cuts than a typical venture capital firm. While potentially exposing them to bigger risks, Lorre claims the approach will help prevent their startup partners from being stymied by a lack of capital.
- The firm will kick off with $50 million from the pair’s personal stash, with the potential to raise hundreds of millions more in outside capital.
“Owning 40% to 80% of a company means that you don’t really need as many hits,” Lore told CNBC. “One big hit at a 40% stake pays for everything else. I do like the idea of these concentrated bets rather than just sprinkling dollars around.”
Leadoff Hitter: First up for VCP is a $10 million investment in NOW//with, a social commerce startup that will offer a “shoppable content destination” for consumers to buy goods touted by celebrities and influencers. The strategy was pioneered by Alibaba in China, and replicated by Tik-Tok owner ByteDance when Covid-19 gave a shot in the arm to at-home entertainment and shopping.